1992 (8) TMI 188 - AT - Central Excise

Summary

Issues:
Stay petition for recovery of dues and penalty under Central Excise & Customs order. Interpretation of exemption notification for job workers affixing brand names. Consideration of brand name eligibility for exemption. Granting waiver of predeposit for appeal hearing.

Analysis:
The judgment involves a Stay Petition by M/s Prakash Industries seeking to halt the recovery of Rs. 4,97,221-37P and a penalty of Rs. 40,000 following an order by the Additional Collector of Central Excise & Customs. The petitioners, represented by Shri B. Das, argued that they are job workers stitching HDPE fabrics into bags for a customer, affixing the brand name 'Konark' on the bags meant for cement packaging. They contended that they are not covered by the exemption notification and requested a waiver of predeposit due to financial constraints.

Shri A. Choudhuri, the Departmental Representative, countered that the brand name owner, M/s Orissa Cement, is not eligible for the exemption, making the petitioners ineligible as per the notification. He argued that the impugned order is justified, and the Stay Application should be rejected.

In response, Shri B. Das referred to Explanation VIII, defining brand names or trade names, and argued that the petitioners, not being cement manufacturers or brand name owners, should be considered eligible for exemption. He cited previous decisions where stay had been granted in similar cases involving manufacturers of containers bearing brand names of products.

The Tribunal, comprising S/Shri K. Sankararaman and T.P. Nambiar, agreed with Shri Das's interpretation, harmonizing para-7 and Explanation VIII. They noted that the brand name 'Konark' on the bags relates to cement, not the bags themselves, warranting a grant of stay. Considering the hardship plea and the defined scope of brand names, the Tribunal ordered a stay on recovery proceedings during the appeal's pendency and directed the transfer of the appeal to a Special Bench for disposal.